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Deloitte report shows 50% rise in insurers who fear industry will miss Solvency II deadline
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Delaying deadline has increased cost and complexity for insurers
A new report from Deloitte, the business advisory firm, highlights the challenges insurers face implementing Solvency II regulations. Conducted by the Economist Intelligence Unit, the latest edition of the annual Deloitte Solvency II survey shows a rising number of insurers believe the industry will miss the January 2014 compliance deadline. The survey of 60 UK-based insurers finds that:
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37% of respondents fear the industry will fail to meet the compliance deadline – up from 24% last year;
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73% of respondents say implementation setbacks have taken a toll on budgets; and
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42% of insurers say Solvency II delays have increased programme costs by more than 5%.
Rick Lester, lead Solvency II partner at Deloitte, said:
“This year’s survey has identified some interesting developments in insurers’ approaches to Solvency II. There has been a 50% increase from last year in the number of respondents who have expressed concern with the industry’s ability to meet the compliance deadline – and that is despite a delay in the implementation date for insurers until 1 January 2014.
“The primary underlying cause for concern is the continued uncertainty around the detailed requirements of Solvency II and the fact that these are unlikely to be clarified until relatively close to the go-live date. This means there will be not much time for insurers and regulators to finalise their arrangements and approach with complete knowledge of the rules.
“Delaying the implementation of the final rules has come at a price for insurers and one in three respondents are concerned about the additional costs of delays. The smallest insurers have suffered the biggest dents in their original budgets while non-life insurers have incurred bigger hits than their life company counterparts.”
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